Angela Merkel threw down the gauntlet to David Cameron last night and said large countries should be prepared to accept more asylum seekers.

The German Chancellor demanded a new European Union system that distributes asylum-seekers to member states based on their population and economic strength.

The call comes as Europe struggles with the growing refugee crisis in the Mediterranean, where hundreds have died in recent days trying to get from northern Africa to Italy.

German Chancellor Angela Merkel has demanded a new European Union system that distributes asylum-seekers to member states based on their population and economic strength

David Cameron insisted at an emergency EU summit on Thursday that the UK would not take any of the refugees – because it was already doing its part by virtue of having the continent's largest aid and defence budgets.

Mrs Merkel's call would however mean that Britain, one of the most populous countries in the UK and one of its most economically successful, would be expected to take in more people.

Speaking at a campaign event ahead of state elections in Bremen, she said yesterday that the EU's own rules on asylum-seekers are not working.

She called for the current rules, known as the Dublin regulations, to be scrapped.

'The Dublin rules need to be changed,' she told fellow EU leaders. 'Five member states account for three-quarters of all asylum-seekers' under the present system.

Under the Dublin regulations, refugees have to claim asylum in the first EU country they enter, and cannot pick and choose between member states.

But Germany has long accused southern EU countries of ignoring the rules and encouraging asylum-seekers to move on.

The majority of refugees arrive on Europe's southern shores after crossing the Mediterranean. The border free Schengen Area means they can easily move onto to other EU countries, despite the rules.

The German government is believed to be particularly concerned that the Italian authorities are not doing enough to register asylum-seekers who arrive there.

The European leaders gathered this week for an emergency meeting in Brussels in the wake of the tragedy in the Mediterranean. Pictured from left is Italian Prime Minister Matteo Renzi, German Chancellor Angela Merkel, French President Francois Hollande and British Prime Minister David Cameron

Germany believes it is being made to bear an disproportionate burden of asylum-seekers lured there by its strong economy.

In 2014, Germany received 173,070 asylum applications, more than twice as many as any other EU country. In the same period, the UK received 31,260 applications, according to UN refugee agency.

Her remarks came a day after Mr Cameron flatly ruled out Britain taking part in an voluntary EU scheme to 'resettle' north African migrants throughout the continent.

He told his counterparts at the EU summit that the UK is already 'playing its part' in the region through the aid budget and offer of ships, and takes in its 'fair share' of refugees compared to other member states.

Donald Tusk, the European Council president, said earlier on Thursday that EU leaders must 'sacrifice some national interests for the common good' by taking part in a 'resettlement' programme.